November 15, 2002
(Government Services and Lands)
The following is being distributed at the request of Petroleum Products Pricing Commission (PPPC):
Commission releases November
15 to December 15 regulated fuel prices;
Low gasoline inventories in North America and a shift in refinery production from gasoline to distillate fuels (home heat and diesel) for the winter have impacted prices for these products in Newfoundland and Labrador.
During this round of regulation, results show a modest increase in the New York Harbour cargo prices for gasoline during the past 30 days, while increased production of distillates has meant a drop in diesel fuel and heating oil prices.
Effective one minute past midnight November 15, maximum prices for gasoline, diesel, propane and home heat fuel will be set for the next 30 days.
Newfoundland and Labrador will see an increase of 0.6 or 0.7 cents per litre (cpl) in gasoline � depending on the impact of HST calculations in a particular pricing zone. Diesel will have a 2.2 cpl decrease at the pump, while home heating fuel prices will shift downward by 2.1 cpl. Residential propane will rise by one cent per litre.
George Saunders, PPPC commissioner, said some may be puzzled by the resultant increase in gasoline prices since world market figures for refined oil products have been lower in recent days than they�ve been for some time.
But activity in the market for petroleum products, such as gasoline, since the Petroleum Products Pricing Commission last established regulated fuel prices October 15 has been anything but stagnant.
In fact, noted the commissioner, for the majority of the past 30 days, the PPPC�s model for regulation (which averages the high and low prices for the month on a daily basis) shows that prices on the world markets were significantly above the previous month�s average.
"People should also keep in mind the product that�s being refined now won�t find its way through the system for another three to four weeks," said Mr. Saunders. "The low prices out there now won�t have its full impact until next month, unless other factors suddenly drive these prices up again over the long term."
Home heating and diesel (distillate) fuels are different products than gasoline and several factors have caused their decline, said the commissioner. Among the influences was a shift in refinery production to build inventories in anticipation of the home heat season and potential tension in the Middle East.
Mr. Saunders said he agrees with the statement from the Energy Information Administration (EIA) in the U.S. that future direction of distillate fuel prices will largely depend on how big the demand is for these products.
Now that fuel deliveries have been completed for the season to coastal Labrador, which includes Zones 10a (Mary�s Harbour/Charlottetown), 11 (coastal Labrador south) and 14 (northern Labrador), the PPPC has decided to proceed with the annual price freeze in those areas.
Last year, the commission implemented a pricing freeze because of coastal Labrador�s unique situation when it comes to supplies. The region receives its final delivery of distillate fuels and gasoline prior to the end of the shipping season, and it isn�t replenished until the shipping season reopens. This freeze will remain in effect until June 15.
"We kept a close eye on the situation in Rigolet, and other small communities where securities of supply were threatened," said Mr. Saunders. "The commission is pleased this situation has been resolved, as the crux of the matter was outside of the PPPC�s jurisdiction."
Fuels - Maximum Retail Pump Prices - Effective November 15, 2002
2002 11 15 9:00 a.m.